Program Write-up Joystick Labs – Video Gaming Industry

Video Gaming has come a long way since Atari was launched in the 1970s and later when the industry began migrating from video arcades to home computers—remember the Commodore and Tandy computers. A guy named Steve Jobs was selling Apple computers out of his parents’ garage. I’ll bet many Santa Clauses in this club remember scrambling in the next decade to find copies of Frogger, Pac-Man, and Space Invaders to put under Christmas trees and in stockings.

Development of video games has become big business, bigger even than the movie industry. Gaming is something on the order of $30 billion a year. Silicon Valley leads the pack but the Triangle area has emerged as one of the top ten areas—with 30 video game studios and companies—ranking somewhere around fifth or sixth in the country.

Joystick Labs, located in the American Tobacco facilities, plays an important role mentoring and fostering emerging video game developers who have great ideas but little business experience and no money. Joystick’s Managing Director John Austin and co-founder Glen Caplan gave us a fascinating overview of their operation and the video game industry. For most of us, their presentation was something of an eye-opener. They were not preaching to the choir. A show of hands revealed few video gamers in our midst except of course for a small number of younger, more “with it” members. However, a later show of hands revealed that many club members reticent to admit game playing confessed to being avid fans of “Angry Birds,” a game ap on their Iphones.

Joystick Labs is an “accelerator” that looks for teams of 2 to 5 developers who are passionate and committed to game development and have a strong entrepreneurial motivation. Joystick provides a small amount of seed money, typically $20,000, space in the American Tobacco facility, mentoring and networking. The goal is to get an exciting and polished game ready to present to “angel” investors or, less likely, venture capitalists to launch a product. Joystick not only wants to get a game started, but “finished.”

Founded in 2010, Joystick Labs was itself funded by “angels,” an individual or group that can scrape together several hundred thousand dollars (not the one to two million venture capitalists sink into promising projects. (I recently kept running into this term but quickly realized that, unfortunately, I have no prospects of becoming an “angel.”)

Of the ninety applicants in the 2010-11 round of competition, Joystick Labs selected seven for funding. Four of the seven are doing well, one is out of business, and two are sort of limping along. As John Austin pointed out, frankly most startups fail for one reason or another but just one big success can offset the failures.

Not all the teams funded by Joystick come with backgrounds in computer science or engineering from high powered schools like MIT or Stanford or Duke. One Joystick funded team, Lab Rats Studio, consists of students at Wake Tech. It has just launched a favorably reviewed game titled M.U.S.E. In game players’ lingo, M.U.S.E. is a “third person shooter.” As John says, the game itself is a “so-so concept” but the team had the commitment to “get it done.” Other teams with projects under development include Nix Hixdra Studios, a two girl Yale team, whose game promotes “world peace and clear skin.” I can just see the cosmetic counter at Nordstrom’s handing out free copies of this game!

One remaining mystery is how game developers make any money. Many of the new games are designed for smart phones and more than 40% of cell phone games are free. Video game developers once sold games for 50 bucks. Now most are free or cost 99 cents. Hundreds of thousands of new aps exist for smart phones. How does one even get noticed? The trick is to get favorably mentioned in the key blogs and to be featured at Apple stores. This is where Joystick’s networking helps.

John and Glen agree that most people in this area when they hear someone has launched a startup their reaction is “what, you couldn’t get a real job” unlike Silicon Valley where the reaction is “cool, man.” This is a perception they are out to change.